10 Questions
What is the principle of insurance that requires the insured to disclose all relevant facts that would increase the premium amount?
Utmost Good Faith
In insurance, what is the term used to describe the insured's monetary interest in the insured property?
Insurable Interest
Which principle of insurance involves the insurer compensating the insured for any possible damage or loss?
Indemnity
If there are more than one insurers, what can the insurer do according to the principle of Contribution?
Ask other insurers to contribute their share of the compensation
What is the duty of the insured in relation to loss minimization?
To minimize the loss to the insured property on the happening of uncertain event
What is the consequence of under insuring your property according to the text?
The average condition will apply
What happens if the premium is not paid within 60 days from the inception date of the cover?
The insurance company will cancel the cover automatically
Which type of home insurance covers loss or damage due to perils like impact with any of the buildings by any road vehicle or animals not belonging to the insured?
House owner policy
Which type of home insurance provides coverage for personal property and loss of use?
Householder policy
What does the term 'average condition' refer to in home insurance?
A condition where under insuring leads to reduced coverage payout
Study Notes
Principles of Insurance
- The principle of Utmost Good Faith requires the insured to disclose all relevant facts that would increase the premium amount.
Types of Home Insurance
- Home insurance that covers loss or damage due to perils like impact with any of the buildings by any road vehicle or animals not belonging to the insured is known as Special Perils Insurance.
Insurable Interest
- Insurable Interest refers to the insured's monetary interest in the insured property.
Principle of Indemnity
- The principle of Indemnity involves the insurer compensating the insured for any possible damage or loss.
Principle of Contribution
- If there are more than one insurers, the principle of Contribution states that the insurer can call upon other insurers to share the loss.
Duty of the Insured
- The duty of the insured in relation to loss minimization is to take all reasonable steps to minimize the loss.
Consequences of Underinsurance
- If a property is underinsured, the consequence is that the insured will bear the shortfall.
Premium Payment
- If the premium is not paid within 60 days from the inception date of the cover, the policy will lapse.
Types of Home Insurance
- Contents Insurance provides coverage for personal property and loss of use.
Average Condition
- The term 'average condition' refers to the assumption that the property is in a reasonable state of maintenance and repair at the time of the loss.
Test your knowledge of property insurance principles and coverage including dwelling, other structures, personal property, loss of use, and liability coverage such as personal liability and medical payments coverage. Explore concepts like utmost good faith and insurable interest.
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